The week in AI

Hi, it’s Jesse in New York. This week, the race was heating up between China and the US for supremacy in artificial intelligence.Artificial [View in browser]( [Bloomberg]( Hi, it’s Jesse in New York. This week, the race was heating up between China and the US for supremacy in artificial intelligence. Hitting its stride or moving too fast? Artificial intelligence has become the latest battleground for world dominance between China and the US, adding one more link in a long chain of technological rivalries between the two superpowers. The US has so far maintained a competitive edge, but an explosion of Chinese startups in recent months has brought its lead into question. Beijing-based search leader Baidu Inc. [claimed](this week that its chatbot service Ernie beats OpenAI’s ChatGPT in several key measures. Food-delivery giant Meituan [joined](the AI race, agreeing to buy a co-founder’s startup for almost $234 million to develop ChatGPT-like services. Chinese billionaire entrepreneurs, scientists, programmers and financiers are expected to propel some [$15 billion]( in spending on AI technology this year. The US isn’t going to miss an opportunity to step up to the plate, though. The Biden administration [plans](to tighten export controls previously [rolled out]( in October to limit sales of some AI chips to China. The new restrictions would make it harder to sell to China without a license, and were aimed in part at [Nvidia Corp.](bbg://securities/NVDA%20US%20EQUITY%20/FA)’s A800 chip, which was previously able to fly under the radar. Nvidia, which gets about one-fifth of its revenue from China, led [declines](in tech stocks after the news. [Quicktake: Why AI Is Next Flashpoint in US-China Tech Rivalry]( The trade restrictions didn’t seem to damp enthusiasm for all things AI at BlackRock Inc., which[ introduced]( a new overweight call on the theme, citing AI as a “mega force.” The world’s largest asset manager, which already owns more than 7% of Nvidia, singled out semiconductor makers and companies with vast sets of data or high potential for automation as those who would be most likely to benefit. OpenAI Inc. continues to dominate the news in all things artificial intelligence. Moody’s Corp. [announced](that it will use [Microsoft Corp.](bbg://securities/MSFT%20US%20EQUITY/MODL) and OpenAI to create an AI assistant to help customers assess risk. Japanese bank Mizuho Financial Group Inc. is [giving](all its employees access to OpenAI, making it one of the country’s first financial firms to adopt the technology. OpenAI also [announced](that London would be the home of its first corporate office outside the US. It wasn’t all wins for OpenAI, though. The company was [accused](of stealing vast amounts of personal information to train its AI models. Meanwhile, China isn’t the only one seeing a surge in AI startups. In the US, [Typeface Inc.](, [Runway AI Inc.Â](and [Inflection AI]( reported successful fundraising efforts this week, reflecting the global surge of interest in generative AI. In fact, Inflection AI, which makes a “kind and supportive” chatbot called Pi, raised an astonishing $1.3 billion in one of the largest funding rounds of Silicon Valley’s current AI frenzy. And there’s more. Check out our list of the 10 biggest, buzziest and best-funded [AI startups to watch]( this year. Not all the news was good news, however. Stability AI’s head of research [resigned](from the startup, making him the second top executive to leave the buzzy unicorn in recent weeks. The distributor of the Stable Diffusion image-generation tool [secured](a convertible note after struggling to raise funding at a $4 billion valuation. With things moving so fast, regulation is always top of mind in any conversation about AI. Don’t miss our deep dive into [AI regulation]( — big tech companies like Alphabet Inc.’s Google, Microsoft, IBM and OpenAI have asked lawmakers in the US to oversee the development of the technology while at the same time fighting measures in the EU that they believe would constrict the fast-growing sector. Meanwhile, New York is looking to [buyÂ](a supercomputer in order to understand and regulate AI itself, and the EU is [introducing](“crash test” systems to ensure new innovations are safe before they hit the market. Is it just me or is reality seeming more and more like a version of the Jetsons? Still, there are some skeptics out there, who see risks in the frenzied rush to unleash AI on everything. Bernstein [downgradedÂ](its rating on Alphabet this week, writing that the Google parent company has gone “from too slow to too fast in AI.” Investors have [yanked]( nearly $44 billion from growth stocks since the start of the year, citing, among other things, concerns that an AI bubble has lifted shares to unsustainable valuations. Few stocks have better embodied Wall Street’s hysteria around artificial intelligence lately than [Palantir Technologies Inc.]( Its shares have more than doubled over the six-week period from the beginning of May, but the stock’s gains have only [hardened](the resolve of skeptical analysts. “The market is in-between on how much of this is hype, and how much is real,” said Hendi Susanto, portfolio manager at Gabelli Funds. —[Jesse Levine](mailto:jlevine206@bloomberg.net) One to watch Watch the latest episode of AI IRL on the alignment problem The increasing number of risks associated with artificial intelligence include repeating and amplifying the biases of its human creators. Can this danger be avoided? On this episode of [AI IRL](, Bloomberg's Nate Lanxon and Jackie Davalos discuss this troubling aspect of AI with Brian Christian, author of The Alignment Problem, Renee Cummings, an AI ethicist and criminologist, and Alex Hanna, director of research at the Distributed AI Research Institute. More from Bloomberg Get Bloomberg Tech newsletters in your inbox: - [Cyber Bulletin]( for coverage of the shadow world of hackers and cyber-espionage - [Game On]( for reporting on the video game business - [Power On]( for Apple scoops, consumer tech news and more - [Screentime]( for a front-row seat to the collision of Hollywood and Silicon Valley - [Soundbite]( for reporting on podcasting, the music industry and audio trends - [Hyperdrive]( for expert insight into the future of cars Follow Us You received this message because you are subscribed to Bloomberg's Tech Daily newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. 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